UNITED STATES
	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C. 20549

	FORM 10-Q

[X]	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2007 or

[ ]	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from               to

Commission File No. 0-13298

	MORGAN STANLEY CORNERSTONE FUND II L.P.

	(Exact name of registrant as specified in its charter)

          New York                              	      13-3212871
(State or other jurisdiction of                 	  (I.R.S. Employer
incorporation or organization)                 	  Identification No.)

Demeter Management Corporation
330 Madison Avenue, 8th Floor
New York, NY 						             10017
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code  (212) 905-2700






(Former name, former address, and former fiscal year, if changed since
last report)


Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days.

Yes    X        No


Indicate by check mark whether the registrant is a large accelerated
filer, an accelerated filer, or a non-accelerated filer.  See definition
of ?accelerated filer and large accelerated filer? in Rule 12b-2 of the
Exchange Act.  (Check one):

Large accelerated filer___Accelerated filer___Non-accelerated filer _X__


Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes ___  No  X



	<page> <table> MORGAN STANLEY CORNERSTONE FUND II L.P.

	INDEX TO QUARTERLY REPORT ON FORM 10-Q

	March 31, 2007

<caption>



PART I. FINANCIAL INFORMATION

				<c>
Item 1. Financial Statements

		Statements of Financial Condition as of March 31, 2007
		(Unaudited) and December 31, 2006 ........................ 2

		Statements of Operations for the Quarters Ended
		March 31, 2007 and 2006 	(Unaudited)....................... 3

		Statements of Changes in Partners? Capital for the
		Quarters Ended March 31, 2007 and 2006 	(Unaudited).........4

		Statements of Cash Flows for the Quarters Ended
		March 31, 2007 and 2006 (Unaudited)........................5

		Notes to Financial Statements (Unaudited) ............. 6-12

Item 2.	Management?s Discussion and Analysis of
			Financial Condition and Results of Operations ..... 13-22

Item 3.	Quantitative and Qualitative Disclosures about
			Market Risk ....................................... 22?35

Item 4.	Controls and Procedures ...............................35

Item 4T.	Controls and Procedures ...............................35


PART II. OTHER INFORMATION

Item 1A.Risk Factors...........................................36

Item 6.	Exhibits...............................................36



</table>


<page> <table> PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

	MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF FINANCIAL CONDITION
<caption>
	March 31,	December 31,
	        2007        	        2006
	$	$
	(Unaudited)
ASSETS

	<c>	<c>
Equity in futures interests trading accounts:
	Unrestricted cash	7,234,088	8,331,036
	Restricted cash	    502,260	        524,953

	     Total cash	   7,736,348	     8,855,989

	Net unrealized gain on open contracts (MS&Co.)	       66,485	       258,505

	     Total Trading Equity	7,802,833	 9,114,494

Due from Morgan Stanley DW	45,293       	        16,888
Interest receivable (Morgan Stanley DW)	       26,787               	        29,322

	     Total Assets	   7,874,913	   9,160,704

LIABILITIES AND PARTNERS' CAPITAL

Liabilities

Redemptions payable	98,377	86,657
Accrued administrative expenses	30,242	         29,687
Accrued management fees	       22,881	         26,632

   	    Total Liabilities	    151,500	       142,976

Partners? Capital

Limited Partners (2,423.717 and
    2,525.775 Units, respectively)	7,460,044	8,722,240
General Partner (85.567 Units)	     263,369	         295,488

	     Total Partners? Capital	    7,723,413	    9,017,728

	     Total Liabilities and Partners? Capital	   7,874,913	    9,160,704

NET ASSET VALUE PER UNIT	    3,077.94                             3,453.29


<fn>
	The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table>	MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF OPERATIONS
(Unaudited)

<caption>
  	   	     For the Quarters Ended March 31,


                                                                         		        2007    	      2006
                                                                               	                      $		          $

			<c>		<c>
INVESTMENT INCOME
	Interest income (Morgan Stanley DW)		    86,211			   106,410

EXPENSES
	Brokerage commissions (Morgan Stanley DW)		121,028	177,732
	Management fees 	   	73,745	   104,199
	Common administrative expenses		12,000	    11,000
	Transaction fees and costs		     10,998	    11,313

		Total Expenses		    217,771	   304,244

NET INVESTMENT LOSS	    (131,560)	   (197,834)

TRADING RESULTS
Trading loss:
	Realized			(637,376)	(383,949)
	Net change in unrealized	      	   (192,020)	   (495,255)

   		 Total Trading Results		   (829,396)	   (879,204)

NET LOSS 	    (960,956)	      (1,077,038)

NET LOSS ALLOCATION

	Limited Partners                                                  		(928,837)	   (1,043,986)
	General Partner                                               	      	(32,119)	  (33,052)

NET LOSS PER UNIT

	Limited Partners                                                  		                (375.35)	(328.66)
	General Partner                                                   		             (375.35)	(328.66)





<fn>

	The accompanying notes are an integral part
	of these financial statements.
</table>
<page> <table> MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF CHANGES IN PARTNERS? CAPITAL
	For the Quarters Ended March 31, 2007 and 2006
	(Unaudited)



<caption>

			                                                         Units of
			                                                      Partnership	 Limited	     General
			                                                         Interest    	     Partners   	          Partner    	     Total
					$	      $	 $

			<c>	<c>	<c>	<c>
Partners? Capital,
   December 31, 2005	3,361.727	12,240,749	377,478	12,618,227

Net Loss	?	(1,043,986)	(33,052)	(1,077,038)

Redemptions	    (251.434)	    (888,932)	            ?     	    (888,932)

Partners? Capital,
   March 31, 2006	  3,110.293	 10,307,831	  344,426	 10,652,257




Partners? Capital,
   December 31, 2006	2,611.342	 8,722,240	295,488	9,017,728

Net Loss	?	(928,837)	(32,119)	(960,956)

Redemptions	    (102.058)	    (333,359)	            ?     	    (333,359)

Partners? Capital,
   March 31, 2007	  2,509.284	 7,460,044	  263,369	 7,723,413







<fn>








The accompanying notes are an integral part
	of these financial statements.
</table>

<page> <table> 	MORGAN STANLEY CORNERSTONE FUND II L.P.
	STATEMENTS OF CASH FLOWS
(Unaudited)


<caption>


				   For the Quarters Ended March 31,

				            2007      	      2006
				     $	$

			<c>	<c>
CASH FLOWS FROM OPERATING ACTIVITIES

Net loss		(960,956)	(1,077,038)
Noncash item included in net loss:
	Net change in unrealized	192,020	495,255

(Increase) decrease in operating assets:
	Restricted cash	22,693	86,168
	Due from Morgan Stanley DW	(28,405)	(39,459)
	Interest receivable (Morgan Stanley DW)	2,535	941

Increase (decrease) in operating liabilities:
	Accrued administrative expenses	   555      	  4,084
	Accrued management fees	        (3,751)	          (5,738)

Net cash used for operating activities	    (775,309)	     (535,787)


CASH FLOWS FROM FINANCING ACTIVITIES

Cash paid for redemptions of Units	   (321,639)	      (884,387)

Net cash used for financing activities	   (321,639)	      (884,387)

Net decrease in unrestricted cash	(1,096,948)	(1,420,174)

Unrestricted cash at beginning of period	   8,331,036	   11,242,503

Unrestricted cash at end of period	    7,234,088	    9,822,329




<fn>



	The accompanying notes are an integral part
	of these financial statements.

</table>


<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS
March 31, 2007
(Unaudited)

The unaudited financial statements contained herein include, in
the opinion of management, all adjustments necessary for a fair
presentation of the results of operations and financial condition
of Morgan Stanley Cornerstone Fund II L.P. (the ?Partnership?).
The financial statements and condensed notes herein should be read
in conjunction with the Partnership's December 31, 2006, Annual
Report on Form 10-K.

1.  Organization
Morgan Stanley Cornerstone Fund II L.P. is a New York limited
partnership organized in 1983 to engage in the speculative trading
of futures contracts, options on futures contracts, and forward
contracts on foreign currencies and other commodity interests.
The Partnership is one of the Morgan Stanley Cornerstone Funds,
comprised of the Partnership, Morgan Stanley Cornerstone Fund III
L.P., and Morgan Stanley Cornerstone Fund IV L.P.

The Partnership?s general partner is Demeter Management
Corporation (?Demeter?). Effective April 1, 2007, Morgan Stanley
DW Inc. (?Morgan Stanley DW?), which previously acted as the non-
clearing broker, was merged into Morgan Stanley & Co. Incorporated
(?MS&Co.?), which has assumed all of the responsibilities of
Morgan Stanley DW.  Upon completion of the merger, MS&Co. has
<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

become the Partnership?s principal commodity broker-dealer
and also acts as the counterparty on all trading of foreign
currency forward contracts.  In addition, Morgan Stanley & Co.
International Limited (?MSIL?) serves as the commodity broker for
trades on the London Metal Exchange.  Effective April 13, 2007,
Morgan Stanley & Co. International Limited changed its name to
Morgan Stanley & Co. International plc.  The commodity brokers
prior to April 1, 2007, were Morgan Stanley DW, MS&Co., and MSIL.
Demeter, MS&Co., and MSIL are wholly-owned subsidiaries of Morgan
Stanley.  The trading managers to the Partnership are Northfield
Trading L.P. and John W. Henry & Company, Inc. (individually, a
?Trading Manager?, or collectively, the ?Trading Managers?).

2.  Related Party Transactions
The Partnership's cash is on deposit with Morgan Stanley DW
(through March 31, 2007), MS&Co., and MSIL in futures, forward,
and options trading accounts to meet margin requirements as
needed.  Monthly, MS&Co. (Morgan Stanley DW, prior to April 1,
2007) pays the Partnership interest income on 80% of its average
daily Net Assets at a rate equal to the average yield on 13-week
U.S. Treasury bills. The Partnership pays brokerage commissions to
MS&Co. (Morgan Stanley DW, prior to April 1, 2007).


<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

3.  Financial Instruments
The Partnership trades futures contracts, options on futures
contracts, and forward contracts on foreign currencies and other
commodity interests.  Futures and forwards represent contracts for
delayed delivery of an instrument at a specified date and price.
Risk arises from changes in the value of these contracts and the
potential inability of counterparties to perform under the terms
of the contracts.  There are numerous factors which may
significantly influence the market value of these contracts,
including interest rate volatility.

The market value of exchange-traded contracts is based on the
settlement price quoted by the exchange on the day with respect
to which market value is being determined.  If an exchange-traded
contract could not have been liquidated on such day due to the
operation of daily limits or other rules of the exchange, the
settlement price shall be the settlement price on the first
subsequent day on which the contract could be liquidated.  The
market value of off-exchange-traded contracts is based on the
fair market value quoted by the counterparty.

The Partnership?s contracts are accounted for on a trade-date
basis and marked to market on a daily basis.  The Partnership
accounts for its derivative investments in accordance with the
<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

provisions of Statement of Financial Accounting Standards No.
133, ?Accounting for Derivative Instruments and Hedging
Activities? (?SFAS No. 133?).  SFAS No. 133 defines a derivative
as a financial instrument or other contract that has all three of
the following characteristics:

1)	One or more underlying notional amounts or payment
provisions;
2)	Requires no initial net investment or a smaller initial net
investment than would be required relative to changes in
market factors;
3)	Terms require or permit net settlement.

Generally, derivatives include futures, forward, swap or options
contracts, and other financial instruments with similar
characteristics such as caps, floors, and collars.

The net unrealized gains (losses) on open contracts, reported as a
component of ?Equity in futures interests trading accounts? on the
Statements of Financial Condition, and their longest contract
maturities were as follows:







<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)


                  Net Unrealized Gains(Losses)
                        On Open Contracts                 Longest Maturities

                Exchange-  Off-Exchange-             Exchange-  Off-Exchange-
Date             Traded      Traded        Total      Traded       Traded
                   $            $            $

Mar. 31, 2007	136,565	(70,080)	66,485	Dec. 2007	Jun. 2007
Dec. 31, 2006	 65,559	192,946	258,505	Dec. 2007	Mar. 2007
The Partnership has credit risk associated with counterparty non-
performance.  As of the date of the financial statements, the
credit risk associated with the instruments in which the
Partnership trades is limited to the amounts reflected in the
Partnership's Statements of Financial Condition.




The Partnership also has credit risk because Morgan Stanley DW
(through March 31, 2007), MS&Co., and MSIL act as the futures
commission merchants or the counterparties, with respect to most
of the Partnership?s assets. Exchange-traded futures, exchange-
traded forward, and exchange-traded futures-styled options
contracts are marked to market on a daily basis, with variations
in value settled on a daily basis. Morgan Stanley DW (through
March 31, 2007), MS&Co., and MSIL, each as a futures commission
merchant for the Partnership?s exchange-traded futures, exchange-
traded forward, and exchange-traded futures-styled options
contracts, are required, pursuant to regulations of the Commodity
Futures Trading Commission (?CFTC?), to segregate from their own
assets, and for the sole benefit of their commodity customers, all
<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)

funds held by them with respect to exchange-traded futures,
exchange-traded forward, and exchange-traded futures-styled <page>
options contracts, including an amount equal to the net unrealized
gains (losses) on all open exchange-traded futures, exchange-
traded forward, and exchange-traded futures-styled options
contracts, which funds, in the aggregate, totaled $7,872,913 and
$8,921,548 at March 31, 2007 and December 31, 2006, respectively.
With respect to the Partnership?s off-exchange-traded forward
currency contracts, there are no daily settlements of variation
in value, nor is there any requirement that an amount equal to the
net unrealized gains (losses) on such contracts be segregated.
However, the Partnership is required to meet margin requirements
equal to the net unrealized loss on open forward currency
contracts in the Partnership accounts with the counterparty, which
is accomplished by daily maintenance of the cash balance in a
custody account held at Morgan Stanley DW for the benefit of
MS&Co.  With respect to those off-exchange-traded forward currency
contracts, the Partnership is at risk to the ability of MS&Co.,
the sole counterparty on all such contracts, to perform. The
Partnership has a netting agreement with MS&Co. This agreement,
which seeks to reduce both the Partnership?s and MS&Co.?s exposure
on off-exchange-traded forward currency contracts, should
materially decrease the Partnership?s credit risk in the event of
MS&Co.?s bankruptcy or insolvency.

<page> MORGAN STANLEY CORNERSTONE FUND II L.P.
NOTES TO FINANCIAL STATEMENTS (CONCLUDED)

4.  New Accounting Developments
In July 2006, the Financial Accounting Standards Board (?FASB?)
issued interpretation No. 48, ?Accounting for Uncertainty in
Income Taxes ? an interpretation of FASB Statement 109? (?FIN
48?).  FIN 48 clarifies the accounting for income taxes by
prescribing the minimum recognition threshold a tax position must
meet before being recognized in the financial statements.  FIN 48
is effective for the Partnership as of January 1, 2007.  Based on
its analysis, management believes that the adoption of FIN 48
will not impact the Partnership?s Financial Statements.




In September 2006, the FASB issued SFAS No. 157, ?Fair Value
Measurements? (?SFAS No. 157?).  SFAS No. 157 defines fair value,
establishes a framework for measuring fair value, and expands
disclosures about fair value measurements.  SFAS NO. 157 is
effective for the Partnership as of January 1, 2008.  The impact
to the Partnership?s Financial Statements, if any, is currently
being assessed.






<page> Item 2. MANAGEMENT?S DISCUSSION AND ANALYSIS OF FINANCIAL
        CONDITION AND RESULTS OF OPERATIONS

Liquidity.  The Partnership deposits its assets with Morgan
Stanley DW (through March 31, 2007), MS&Co., and MSIL as commodity
brokers in separate futures, forward, and options trading accounts
established for each Trading Manager.  Such assets are used as
margin to engage in trading and may be used as margin solely for
the Partnership?s trading. The assets are held in either non-
interest bearing bank accounts or in securities and instruments
permitted by the CFTC for investment of customer segregated or
secured funds.  Since the Partnership?s sole purpose is to trade
in futures, forwards, and options, it is expected that the
Partnership will continue to own such liquid assets for margin
purposes.

The Partnership?s investment in futures, forwards, and options
may, from time to time, be illiquid.  Most U.S. futures exchanges
limit fluctuations in prices during a single day by regulations
referred to as ?daily price fluctuations limits? or ?daily
limits?.  Trades may not be executed at prices beyond the daily
limit.  If the price for a particular futures or options contract
has increased or decreased by an amount equal to the daily limit,
positions in that futures or options contract can neither be taken
nor liquidated unless traders are willing to effect trades at or
within the limit.  Futures prices have occasionally moved the
daily limit for several consecutive days with little or no
trading.  These market conditions could prevent the Partnership
<page> from promptly liquidating its futures or options contracts
and result in restrictions on redemptions.

There is no limitation on daily price moves in trading forward
contracts on foreign currencies.  The markets for some world
currencies have low trading volume and are illiquid, which may
prevent the Partnership from trading in potentially profitable
markets or prevent the Partnership from promptly liquidating
unfavorable positions in such markets, subjecting it to
substantial losses.  Either of these market conditions could
result in restrictions on redemptions.  For the periods covered by
this report, illiquidity has not materially affected the
Partnership?s assets.

There are no known material trends, demands, commitments, events,
or uncertainties at the present time that are reasonably likely to
result in the Partnership?s liquidity increasing or decreasing in
any material way.

Capital Resources.  The Partnership does not have, nor does it
expect to have, any capital assets.  Redemptions of units of
limited partnership interest (?Unit(s)?) in the future will affect
the amount of funds available for investments in futures,
forwards, and options in subsequent periods. It is not possible to
estimate the amount, and therefore the impact, of future outflows
of Units.

<page> There are no known material trends, favorable or
unfavorable, that would affect, nor any expected material changes
to, the Partnership?s capital resource arrangements at the present
time.

Off-Balance Sheet Arrangements and Contractual Obligations.  The
Partnership does not have any off-balance sheet arrangements, nor
does it have contractual obligations or commercial commitments to
make future payments that would affect its liquidity or capital
resources.

Results of Operations
General.  The Partnership?s results depend on the Trading Managers
and the ability of each Trading Manager?s trading program to take
advantage of price movements in the futures, forward, and options
markets.  The following presents a summary of the Partnership?s
operations for the three month periods ended March 31, 2007 and
2006, and a general discussion of its trading activities during
each period.  It is important to note, however, that the Trading
Managers trade in various markets at different times and that
prior activity in a particular market does not mean that such
market will be actively traded by the Trading Managers or will be
profitable in the future. Consequently, the results of operations
of the Partnership are difficult to discuss other than in the
context of the Trading Managers? trading activities on behalf of
the Partnership during the period in question. Past performance is
no guarantee of future results.
<page> The Partnership?s results of operations set forth in the
financial statements on pages 2 through 12 of this report are
prepared in accordance with accounting principles generally
accepted in the United States of America, which require the use of
certain accounting policies that affect the amounts reported in
these financial statements, including the following:  The
contracts the Partnership trades are accounted for on a trade-date
basis and marked to market on a daily basis.  The difference
between their cost and market value is recorded on the Statements
of Operations as ?Net change in unrealized trading profit (loss)?
for open (unrealized) contracts, and recorded as ?Realized trading
profit (loss)? when open positions are closed out.  The sum of
these amounts constitutes the Partnership?s trading results.  The
market value of a futures contract is the settlement price on the
exchange on which that futures contract is traded on a particular
day. The value of a foreign currency forward contract is based on
the spot rate as of the close of business.  Interest income, as
well as management fees, incentive fees, brokerage commissions,
and transaction fees and costs of the Partnership are recorded on
an accrual basis.

Demeter believes that, based on the nature of the operations of
the Partnership, no assumptions relating to the application of
critical accounting policies other than those presently used
could reasonably affect reported amounts.


<page> For the Quarter Ended March 31, 2007
The Partnership recorded total trading results including interest
income totaling $(743,185) and expenses totaling $217,771,
resulting in a net loss of $960,956 for the quarter ended March
31, 2007. The Partnership?s net asset value per Unit decreased
from $3,453.29 at December 31, 2006 to $3,077.94 at March 31,
2007.

The most significant trading losses of approximately 8.6% were
recorded in the currency sector during January from both short
and long positions in the South African rand versus the U.S.
dollar as the value of the South African rand moved without
consistent direction due to conflicting economic data out of
South Africa.  Further losses were recorded from short positions
in the South African rand versus the U.S. dollar during March as
the value of the South African rand reversed sharply higher
relative to the U.S. dollar on expectations that increased demand
for South Africa?s exports would significantly improve the South
African economy.  Elsewhere in the currency markets, losses were
recorded during January from long positions in the Australian
dollar and New Zealand dollar versus the U.S. dollar as the value
of the U.S. dollar strengthened against these currencies after a
government report showed that U.S. job growth had been
unexpectedly higher during December 2006.  Short positions in the
New Zealand dollar versus the U.S. dollar resulted in further
losses during February as the value of the New Zealand dollar
<page> reversed higher amid speculation that the Reserve Bank of
New Zealand would increase its benchmark interest rate in the
near-term.  Losses were also recorded during March from both
short and long positions in the Australian dollar versus the U.S.
dollar as the value of the Australian dollar moved without
consistent direction due to uncertainty regarding the future
interest rate policy of the Reserve Bank of Australia.  Elsewhere
in the currency markets, long positions in the British pound
versus the U.S. dollar experienced losses during February as the
value of the British pound weakened against the U.S. dollar after
a report showed U.K. services growth had slowed in January.
Further losses were incurred during March from newly established
short positions in the British pound versus the U.S. dollar as
the value of the British pound moved higher.  Smaller losses were
experienced from short positions in the Mexican peso versus the
U.S. dollar as the Mexican peso strengthened on increased
speculation of an interest rate hike from the Bank of Mexico.
Additional losses of approximately 2.7% were incurred in the
global stock index sector during January from long positions in
U.S. and Pacific Rim equity index futures as prices weakened due
to profit-taking.  Further losses were experienced during
February from long positions in U.S., Pacific Rim, and European
stock index futures as prices reversed sharply lower after a
massive sell-off in the global equity markets that began on
February 27, 2007 following comments from former U.S. Federal
<page> Reserve Chairman Alan Greenspan that the U.S. economy
could be due for a recession.  Furthermore, concerns that tighter
credit conditions in China and Japan might dampen global growth
first sent Chinese stock markets plunging before the sell-off
spread to other equity markets.  Losses were also experienced
during March from newly established short positions in U.S.,
Pacific Rim, and European equity index futures as prices drifted
higher on investor sentiment that global markets had been ?over-
sold? in recent weeks.  Smaller losses of approximately 0.7% were
recorded in the global interest rate sector primarily during
February from short positions in German and U.S. fixed-income
futures as prices reversed higher in a flight to quality after
the aforementioned significant sell-off in the global equity
markets.  During March, newly established long positions in
German and U.S. interest rate futures incurred losses as prices
moved lower later in the month amid reduced demand for the ?safe-
haven? of fixed-income investments after the stabilization of the
global equity markets. Furthermore, German interest rate futures
were pressured lower on strong economic data out of Germany,
while U.S. interest rate prices declined after a stronger than
expected government jobs report.


For the Quarter Ended March 31, 2006
The Partnership recorded total trading results including interest
income totaling $(772,794) and expenses totaling $304,244,
<page> resulting in a net loss of $1,077,038 for the quarter ended
March 31, 2006. The Partnership?s net asset value per Unit
decreased from $3,753.50 at December 31, 2005 to $3,424.84 at
March 31, 2006.

The most significant trading losses of approximately 9.6% were
recorded in the currency markets from long U.S. dollar positions
versus the Japanese yen, Norwegian krone, and the euro as the
value of the U.S. dollar moved lower during January on
expectations that a string of increases in interest rates by the
U.S. Federal Reserve could possibly come to an end.  Also pushing
the value of the U.S. dollar lower against its rivals was
speculation that China might move to diversify some of its U.S.
dollar based assets into other currencies.  Additional losses in
the currency markets were experienced during February from short
positions in the Japanese yen versus the U.S. dollar as the value
of the yen moved higher against the U.S. dollar after the release
of better than expected Japanese machinery orders data and
speculation that the Bank of Japan might move to tighten monetary
policy in Japan.  Losses in the currency markets were also
recorded during February from long positions in the euro and the
Swiss franc against the U.S. dollar as the value of these
currencies declined on renewed speculation for higher U.S.
interest rates.  Further losses were recorded during March from
short positions in euro, Swiss franc, and the Norwegian krone
<page> relative to the U.S. dollar as the value of these European
currencies moved higher after the release of generally positive
economic data from the Euro-Zone reinforced expectations that
European interest rates would continue to rise.  The value of the
euro then reversed lower against the U.S. dollar amid negative
economic data regarding European consumer spending, resulting in
losses from newly established long positions.  Finally,
additional losses were experienced during March from both long
and short positions in the Polish zloty against the U.S. dollar
as the value of the zloty moved without consistent direction.
Within the energy markets, losses of approximately 2.6% were
experienced during February from long positions in crude oil and
its related products as prices declined after an announcement by
Chinese government authorities that China would place an emphasis
on prospecting alternative energy sources in the future, reports
of larger than expected supplies from the International Energy
Agency, and mild weather in the Northeastern U.S.  Further losses
in the energy markets were recorded during March from short
positions in the aforementioned products as prices strengthened
early in the month on supply fears fueled by news of geopolitical
tensions in Nigeria and Iran.  Smaller losses of approximately
0.1% were incurred in the global interest rate futures markets,
primarily during January, from both long and short positions in
Japanese fixed-income futures as prices experienced short-term
volatile price movement amid uncertainty regarding the future
<page> interest rate policy of the Bank of Japan and the U.S.
Federal Reserve.  A portion of the Partnership?s overall losses
for the quarter was offset by gains of approximately 2.6% in the
metals markets primarily during January from long futures
positions in copper, aluminum, zinc, and nickel as prices
strengthened amid news of weak supplies, forecasts for continued
buying by China, and acceleration in demand from Japan, Europe,
and the U.S.  Elsewhere in the metals markets, gains were
recorded from long futures positions in silver and gold as
precious metals prices moved higher on persistent demand from
foreign central banks.  Additional gains of approximately 0.4%
were recorded in the global stock index futures markets during
January from long positions in European stock index futures as
prices trended higher on strong corporate earnings, and solid
economic data.  Smaller gains of approximately 0.1% were
experienced in the agricultural markets from long positions in
sugar futures as prices trended higher during January, moving to
their highest level since 1981 in response to a decline in
inventories, as well as increased ethanol demand.

Item 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Introduction
The Partnership is a commodity pool engaged primarily in the
speculative trading of futures, forwards, and options.  The
market-sensitive instruments held by the Partnership are acquired
<page> for speculative trading purposes only and, as a result, all
or substantially all of the Partnership?s assets are at risk of
trading loss.  Unlike an operating company, the risk of market-
sensitive instruments is inherent to the primary business activity
of the Partnership.

The futures, forwards, and options traded by the Partnership
involve varying degrees of related market risk.  Market risk is
often dependent upon changes in the level or volatility of
interest rates, exchange rates, and prices of financial
instruments and commodities, factors that result in frequent
changes in the fair value of the Partnership?s open positions,
and consequently in its earnings, whether realized or unrealized,
and cash flow.  Gains and losses on open positions of exchange-
traded futures, exchange-traded forward, and exchange-traded
futures-styled options contracts are settled daily through
variation margin.  Gains and losses on off-exchange-traded
forward currency contracts are settled upon termination of the
contract.  However, the Partnership is required to meet margin
requirements equal to the net unrealized loss on open forward
currency contracts in the Partnership accounts with the
counterparty, which is accomplished by daily maintenance of the
cash balance in a custody account held at Morgan Stanley DW for
the benefit of MS&Co.

The Partnership?s total market risk may increase or decrease as
it is influenced by a wide variety of factors, including, but not
<page> limited to, the diversification among the Partnership?s
open positions, the volatility present within the markets, and
the liquidity of the markets.

The face value of the market sector instruments held by the
Partnership is typically many times the applicable margin
requirements.  Margin requirements generally range between 2% and
15% of contract face value.  Additionally, the use of leverage
causes the face value of the market sector instruments held by
the Partnership typically to be many times the total
capitalization of the Partnership.

The Partnership?s past performance is no guarantee of its future
results.  Any attempt to numerically quantify the Partnership?s
market risk is limited by the uncertainty of its speculative
trading.  The Partnership?s speculative trading and use of
leverage may cause future losses and volatility (i.e., ?risk of
ruin?) that far exceed the Partnership?s experiences to date
under the ?Partnership?s Value at Risk in Different Market
Sectors? section and significantly exceed the Value at Risk
(?VaR?) tables disclosed.

Limited partners will not be liable for losses exceeding the
current net asset value of their investment.



<page> Quantifying the Partnership?s Trading Value at Risk
The following quantitative disclosures regarding the Partnership?s
market risk exposures contain ?forward-looking statements? within
the meaning of the safe harbor from civil liability provided for
such statements by the Private Securities Litigation Reform Act of
1995 (set forth in Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934).  All
quantitative disclosures in this section are deemed to be forward-
looking statements for purposes of the safe harbor, except for
statements of historical fact.

The Partnership accounts for open positions on the basis of mark
to market accounting principles.  Any loss in the market value of
the Partnership?s open positions is directly reflected in the
Partnership?s earnings and cash flow.

The Partnership?s risk exposure in the market sectors traded by
the Trading Managers is estimated below in terms of VaR. The
Partnership estimates VaR using a model based upon historical
simulation (with a confidence level of 99%) which involves
constructing a distribution of hypothetical daily changes in the
value of a trading portfolio.  The VaR model takes into account
linear exposures to risk including equity and commodity prices,
interest rates, foreign exchange rates, and correlation among
these variables. The hypothetical changes in portfolio value are
based on daily percentage changes observed in key market indices
or other market factors (?market risk factors?) to which the
<page> portfolio is sensitive.  The one-day 99% confidence level
of the Partnership?s VaR corresponds to the negative change in
portfolio value that, based on observed market risk factors, would
have been exceeded once in 100 trading days, or one day in 100.
VaR typically does not represent the worst case outcome.
Demeter uses approximately four years of daily market data (1,000
observations) and re-values its portfolio (using delta-gamma
approximations) for each of the historical market moves that
occurred over this time period.  This generates a probability
distribution of daily ?simulated profit and loss? outcomes.  The
VaR is the appropriate percentile of this distribution.  For
example, the 99% one-day VaR would represent the 10th worst
outcome from Demeter?s simulated profit and loss series.

The Partnership?s VaR computations are based on the risk
representation of the underlying benchmark for each instrument or
contract and do not distinguish between exchange and non-exchange
dealer-based instruments. They are also not based on exchange
and/or dealer-based maintenance margin requirements.

VaR models, including the Partnership?s, are continually evolving
as trading portfolios become more diverse and modeling techniques
and systems capabilities improve.  Please note that the VaR model
is used to numerically quantify market risk for historic
reporting purposes only and is not utilized by either Demeter or
the Trading Managers in their daily risk management activities.
<page> Please further note that VaR as described above may not be
comparable to similarly-titled measures used by other entities.

The Partnership?s Value at Risk in Different Market Sectors
The following table indicates the VaR associated with the
Partnership?s open positions as a percentage of total Net Assets
by primary market risk category at March 31, 2007 and 2006.  At
March 31, 2007 and 2006, the Partnership?s total capitalization
was approximately $8 million and $11 million, respectively.

Primary Market            March 31, 2007      March 31, 2006
Risk Category             Value at Risk        Value at Risk

Currency	          (2.94)%   	(1.22)%

Interest Rate	     (0.61) 	   (1.25)

Equity	(0.31)	(1.48)

Commodity	(0.25)	(0.23)

Aggregate Value at Risk	      (2.84)%	   (2.38)%

The VaR for a market category represents the one-day downside
risk for the aggregate exposures associated with this market
category.  The Aggregate Value at Risk listed above represents
the VaR of the Partnership?s open positions across all the market
categories, and is less than the sum of the VaRs for all such
market categories due to the diversification benefit across asset
classes.

Because the business of the Partnership is the speculative
trading of futures, forwards, and options, the composition of its
<page> trading portfolio can change significantly over any given
time period, or even within a single trading day.  Such changes
could positively or negatively materially impact market risk as
measured by VaR.

The table below supplements the quarter-end VaR set forth above
by presenting the Partnership?s high, low, and average VaR, as a
percentage of total Net Assets for the four quarter-end reporting
periods from April 1, 2006, through March 31, 2007.

Primary Market Risk Category	High	   Low	     Average
Currency	(2.97)%	 (1.54)%	(2.38)%

Interest Rate	(1.55)	 (0.44)	(0.90)

Equity	(1.29)	 (0.14)	(0.64)

Commodity	(0.53)	 (0.25)	(0.38)


Aggregate Value at Risk	(3.09)%	 (1.93)%	(2.57)%


Limitations on Value at Risk as an Assessment of Market Risk
VaR models permit estimation of a portfolio?s aggregate market
risk exposure, incorporating a range of varied market risks,
reflect risk reduction due to portfolio diversification or hedging
activities, and can cover a wide range of portfolio assets.
However, VaR risk measures should be viewed in light of the
methodology?s limitations, which include, but may not be limited
to the following:


<page>
*	past changes in market risk factors will not always result in
accurate predictions of the distributions and correlations of
future market movements;
*	changes in portfolio value caused by market movements may
differ from those of the VaR model;
*	VaR results reflect past market fluctuations applied to
current trading positions while future risk depends on future
positions;
*	VaR using a one-day time horizon does not fully capture the
market risk of positions that cannot be liquidated or hedged
within one day; and
*	the historical market risk factor data used for VaR estimation
may provide only limited insight into losses that could be
incurred under certain unusual market movements.

In addition, the VaR tables above, as well as the past performance
of the Partnership, give no indication of the Partnership?s
potential ?risk of ruin?.

The VaR tables provided present the results of the Partnership?s
VaR for each of the Partnership?s market risk exposures and on an
aggregate basis at March 31, 2006, and for the four quarter-end
reporting periods from April 1, 2006, through March 31, 2007.  VaR
is not necessarily representative of the Partnership?s historic
risk, nor should it be used to predict the Partnership?s future
<page> financial performance or its ability to manage or monitor
risk.  There can be no assurance that the Partnership?s actual
losses on a particular day will not exceed the VaR amounts
indicated above or that such losses will not occur more than once
in 100 trading days.

Non-Trading Risk
The Partnership has non-trading market risk on its foreign cash
balances.  These balances and any market risk they may represent
are immaterial.

The Partnership also maintains a substantial portion of its
available assets in cash at MS&Co. (Morgan Stanley DW, prior to
April 1, 2007); as of March 31, 2007, such amount is equal to
approximately 96% of the Partnership?s net asset value.  A decline
in short-term interest rates would result in a decline in the
Partnership?s cash management income. This cash flow risk is not
considered to be material.

Materiality, as used throughout this section, is based on an
assessment of reasonably possible market movements and any
associated potential losses, taking into account the leverage,
optionality, and multiplier features of the Partnership?s market-
sensitive instruments, in relation to the Partnership?s Net
Assets.


<page>
Qualitative Disclosures Regarding Primary Trading Risk Exposures
The following qualitative disclosures regarding the Partnership?s
market risk exposures - except for (A) those disclosures that are
statements of historical fact and (B) the descriptions of how the
Partnership manages its primary market risk exposures - constitute
forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Securities Exchange Act.
The Partnership?s primary market risk exposures, as well as the
strategies used and to be used by Demeter and the Trading Managers
for managing such exposures, are subject to numerous
uncertainties, contingencies and risks, any one of which could
cause the actual results of the Partnership?s risk controls to
differ materially from the objectives of such strategies.
Government interventions, defaults and expropriations, illiquid
markets, the emergence of dominant fundamental factors, political
upheavals, changes in historical price relationships, an influx of
new market participants, increased regulation, and many other
factors could result in material losses, as well as in material
changes to the risk exposures and the risk management strategies
of the Partnership.  Investors must be prepared to lose all or
substantially all of their investment in the Partnership.

The following were the primary trading risk exposures of the
Partnership at March 31, 2007, by market sector.  It may be
anticipated, however, that these market exposures will vary
materially over time.
<page>
Currency.  The largest market exposure of the Partnership at March
31, 2007, was to the currency sector.  The Partnership?s currency
exposure is to exchange rate fluctuations, primarily fluctuations
which disrupt the historical pricing relationships between
different currencies and currency pairs.  Interest rate changes,
as well as political and general economic conditions influence
these fluctuations. The Partnership?s primary exposure at March
31, 2007, was to outright U.S. dollar positions.  Outright
positions consist of the U.S. dollar vs. other currencies.  These
other currencies include major and minor currencies.  Demeter does
not anticipate that the risk associated with the Partnership?s
currency trades will change significantly in the future.

Interest Rate.  The second largest market exposure of the
Partnership at March 31, 2007, was to the global interest rate
sector.  This exposure was primarily spread across European, U.S.,
and Japanese interest rate sectors. Interest rate movements
directly affect the price of the sovereign bond futures positions
held by the Partnership and indirectly affect the value of its
stock index and currency positions.  Interest rate movements in
one country, as well as relative interest rate movements between
countries, materially impact the Partnership?s profitability.  The
Partnership?s primary interest rate exposure is generally to
interest rate fluctuations in the U.S. and the other G-7 countries
interest rates.  The G-7 countries consist of France, the U.S.,
Britain, Germany, Japan, Italy, and Canada.  Demeter anticipates
<page> that the G-7 countries? interest rates will remain the
primary interest rate exposures of the Partnership for the
foreseeable future.  The speculative futures positions held by the
Partnership may range from short to long-term instruments.
Consequently, changes in short, medium, or long-term interest
rates may have an effect on the Partnership.

Equity.  At March 31, 2007, the Partnership had market exposure to
the global stock index sector, primarily to equity price risk in
the G-7 countries.  The stock index futures traded by the
Partnership are by law limited to futures on broadly-based
indices.  At March 31, 2007, the Partnership?s primary exposures
were to the S&P/MIB (Italy), TAIWAN (Taiwan), NASDAQ 100 (U.S.),
S&P 500 (U.S.), and Hang Seng (China) stock indices.  The
Partnership is primarily exposed to the risk of adverse price
trends or static markets in the U.S., European, and Asian stock
indices.  Static markets would not cause major market changes, but
would make it difficult for the Partnership to avoid trendless
price movements, resulting in numerous small losses.

Commodity.
Energy.  The third largest market exposure of the Partnership
at March 31, 2007, was to the energy sector.  The
Partnership?s primary energy exposure was to futures
contracts in crude oil and its related products, as well as
natural gas.  Price movements in these markets result from
geopolitical developments, particularly in the Middle East,
<page> as well as weather patterns, and other economic
fundamentals. Significant profits and losses, which have been
experienced in the past, are expected to continue to be
experienced in the future.  Natural gas has exhibited
volatility in price resulting from weather patterns and
supply and demand factors and will likely continue in this
choppy pattern.

Qualitative Disclosures Regarding Non-Trading Risk Exposure
The following was the only non-trading risk exposure of the
Partnership at March 31, 2007:

Foreign Currency Balances.  The Partnership?s primary foreign
currency balances at March 31, 2007, were in the euros, Hong
Kong dollars, Japanese yen, British pounds, and Canadian
dollars.  The Partnership controls the non-trading risk of
foreign currency balances by regularly converting them back
into U.S. dollars upon liquidation of their respective
positions.

Qualitative Disclosures Regarding Means of Managing Risk Exposure
The Partnership and the Trading Managers, separately, attempt to
manage the risk of the Partnership?s open positions in essentially
the same manner in all market categories traded. Demeter attempts
to manage market exposure by diversifying the Partnership?s assets
among different Trading Managers in a multi-manager Partnership,
each of whose strategies focus on different market sectors and
<page> trading approaches, and by monitoring the performance of
the Trading Managers daily. In addition, the Trading Managers
establish diversification guidelines, often set in terms of the
maximum margin to be committed to positions in any one market
sector or market-sensitive instrument.

Demeter monitors and controls the risk of the Partnership?s non-
trading instrument, cash.  Cash is the only Partnership investment
directed by Demeter, rather than the Trading Managers.

Item 4.	CONTROLS AND PROCEDURES
   (a)	As of the end of the period covered by this quarterly
report, the President and Chief Financial Officer of
Demeter, the general partner of the Partnership, have
evaluated the effectiveness of the Partnership?s
disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) of the Exchange Act), and have
judged such controls and procedures to be effective.

(b)	There have been no material changes during the period
covered by this quarterly report in the Partnership?s
internal control over financial reporting (as defined in
Rules 13a-15(f) and 15d-15(f) of the Exchange Act) or in
other factors that could significantly affect these
controls subsequent to the date of their evaluation.


<page>
Item 4T.	CONTROLS AND PROCEDURES
Not applicable.



<page> PART II.  OTHER INFORMATION

Item 1A. RISK FACTORS
Information regarding risk factors appears in Item 2.
?Management?s Discussion and Analysis of Financial Condition and
Results of Operations? and Item 3.  ?Quantitative and Qualitative
Disclosures about Market Risk? of this Form 10-Q.  There have been
no other material changes from the risk factors previously
referenced in the Partnership?s Report on Form 10-K for the fiscal
year ended December 31, 2006.

Item 6.  EXHIBITS
31.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to Section 302 of the Sarbanes-Oxley
Act of 2002.

32.01	Certification of President of Demeter Management
Corporation, the general partner of the Partnership,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002.

32.02	Certification of Chief Financial Officer of Demeter
Management Corporation, the general partner of the
Partnership, pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.









<page>







SIGNATURE



Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.




                        Morgan Stanley Cornerstone Fund II L.P.
                        (Registrant)

                        By: Demeter Management Corporation
                            (General Partner)

May 15, 2007            By: /s/ Lee Horwitz
                                Lee Horwitz
                                Chief Financial Officer



The General Partner which signed the above is the only party
authorized to act for the Registrant.  The Registrant has no
principal executive officer, principal financial officer,
controller, or principal accounting officer and has no Board of
Directors.



















DEAN WITTER CORNERSTONE FUND II
NOTES TO FINANCIAL STATEMENTS (CONTINUED)






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